Report on the development of budgetary management of municipalities, voluntary associations of municipalities and regions as at 30 April 2025
In April 2025, regional budgets reported a surplus of CZK 7.4 billion, which is the lowest figure for the entire period under review. Compared to the same period last year, this represents a significant year-on-year decline, despite continued revenue growth. The main factor behind this development was the more pronounced growth in current expenditure, which exceeded the only slight increase in revenue.
On the revenue side, this was mainly due to growth in non-investment transfers, particularly in the area of direct expenditure on education. However, local government own-source revenue fell slightly, with tax revenue growing only slowly year-on-year. The expenditure side saw growth in both current (especially for school operations) and capital expenditure (primarily for education and municipal services), which points to a more active budgetary policy on the part of municipalities and regions in the spring of this year.
Local budgets are entering the second quarter of 2025 in an environment of moderate economic recovery and stable inflation (inflation fell by 0.9% to 1.8% in April, below the Czech National Bank's inflation target, confirming the easing of price pressures). Although the balance of local budgets has fallen significantly year-on-year, their finances remain stable. The results mainly reflect higher investment activity by regions and municipalities, which is positive in the long term. Although current expenditure is growing faster than revenue, local government budgets remain in surplus, while facing increasing pressure on operating financing.
Detailed information is provided in the Monitor system (data for territorial budgets can be obtained in the Analytical section under Local organizations).
Management of Local Governments
In April 2025, regions, municipalities, and voluntary associations of municipalities had a budget surplus of CZK 7.4 billion. This was the lowest April result for local budgets since 2015. Compared to the same period last year, this represents a decrease of 75.1%, or CZK 22.4 billion. This development was mainly due to faster growth in current expenditure. After adjusting for direct expenditure on education and subsidies to private schools1, the adjusted budget balance was CZK 6.7 billion, representing a year-on-year decline of 77.1%, or CZK 22.7 billion.
Revenues of territorial budgets:
Total consolidated revenues of territorial budgets in April 2025 amounted to CZK 269.8 billion, representing a year-on-year increase of only 0.6%, or CZK 1.6 billion. After adjusting the revenues of regions and municipalities (in the case of the City of Prague) for direct expenditures on education and subsidies for private schools1, the adjusted revenues amounted to CZK 194.6 billion. The own revenuesi of local budgets, which amounted to CZK 159.5 billion, fell by 2.2% year-on-year, i.e. by CZK 3.5 billion. The self-sufficiency of regional budgets, which represents the share of own revenues in total adjusted revenues , was 82% in April this year and remained almost unchanged year-on-year.
The year-on-year increase in total revenues is mainly due to transfers (up 4.9% year-on-year, i.e. by CZK 5.1 billion), which reached CZK 110.3 billion. This was exclusively due to an 8.3% increase in non-investment transfers, i.e. by CZK 7.9 billion, which amounted to CZK 102.7 billion in April. On the contrary, investment transfers, which account for only a fraction of total transfers, fell by 26.3% year-on-year, i.e. CZK 2.7 billion.
Tax revenues increased by 2.7% year-on-year, i.e. by CZK 3.5 billion, to CZK 132.1 billion. The year-on-year decline in non-tax revenues by 23.5%, i.e. by CZK 7.6 billion, to CZK 24.6 billion is related to the payment of Sberbank CZ creditors, which took place in the previous year, and a decline in interest income.
Expenditure of territorial budgets:
Total consolidated local government expenditure in April 2025 amounted to CZK 262.4 billion, representing a year-on-year increase of 10.1%, or CZK 24 billion. After adjusting expenditure for direct expenditure on education and subsidies for private schools1, adjusted expenditure amounted to CZK 187.9 billion.
Current expenditures increased by 8.4%, i.e. by CZK 17.5 billion, and amounted to CZK 226.2 billion. This was due to an increase in transfers to foreign and established contributory organizations (especially primary schools) and expenditures on transport services – railways. Capital expenditures increased by 22% year-on-year, i.e. by CZK 6.5 billion, to CZK 36.1 billion, mainly due to investments in primary schools and municipal services.
Management of regions
In April 2025, the regions reported a positive budget balance of CZK 1.3 billion. The result fell significantly year-on-year by 87.7%, or CZK 9.2 billion, especially when compared to last year's historically highest surplus (see Chart No. 2). After adjusting the balance for direct education expenditures and subsidies for private schools1, the adjusted surplus amounted to CZK 0.6 billion, representing a year-on-year decline of 93.6%, or CZK 9.5 billion.
Regional revenues
Total regional revenues reached CZK 121.2 billion at the end of April 2025, representing a year-on-year decline of 1.5%, or CZK 1.8 billion. After adjusting for direct expenditures on education and subsidies for private schools1, adjusted revenues amounted to CZK 55.7 billion. Year-on-year, there was a decline in the regions' own revenuesi, which amounted to CZK 36.9 billion and accounted for 66.3% of total adjusted revenues2.
Tax revenues, which constitute the most significant part of own revenues, increased year-on-year by 3.4%, i.e. by CZK 1.1 billion, to CZK 32.3 billion. The most significant increase was recorded in income from personal income tax (by 9%, or CZK 0.7 billion), reflecting wage and salary growth, but also the impact of tax changes effective from 2024. Revenues from VAT also increased (by 1.5%, or CZK 0.3 billion) as a result of growth in nominal household expenditures. Other tax revenues, which account for only a small portion of total tax revenues, and revenues from corporate income tax increased only slightly year-on-year.
In April 2025, regions received transfers in the amount of CZK 84.2 billion (year-on-year growth of 1.6%, i.e. CZK 1.3 billion). Of these, non-investment transfers received by the regions reached CZK 82.7 billion (year-on-year growth of 6.2%, i.e. CZK 4.8 billion). Investment transfers received by the regions amounted to CZK 1.6 billion (year-on-year decrease by 69%, i.e. by CZK 3.5 billion).
Regional expenditure
Total regional expenditure in April 2025 amounted to CZK 119.9 billion, representing a year-on-year increase of 6.6%, or CZK 7.4 billion. After adjusting regional expenditure for direct expenditure on education and subsidies for private schools1, adjusted expenditure amounted to CZK 55.1 billion. The largest share of the year-on-year growth in total expenditure was accounted for by current expenditure (up 6.7%, or CZK 7.1 billion), which reached CZK 112.1 billion. Transfers to contributory and similar organizations reached CZK 81.3 billion and accounted for 73% of total current expenditure, mainly in the form of non-investment transfers to primary and nursery schools as part of direct expenditure on education. Expenditure on transport services – railways contributed to the increase in current expenditure. Capital expenditure increased year-on-year (by 4.8%, i.e. CZK 0.4 billion) to CZK 7.8 billion, mainly due to increased investment in sports activities, museums, and galleries.
The balances on bank accounts and the debt of regions are only available for March 20253 from: Report on the development of budgetary management of municipalities, voluntary associations of municipalities and regions as at 31 March 2025.
Management of Municipalities
In April 2025, municipalities recorded their lowest ever budget surplus of CZK 5.7 billion. Compared to the previous year, when a record surplus was achieved, this represents a significant year-on-year decline (see Chart No. 3). Of this, the budget of the capital city of Prague ended April with a surplus of CZK 5.4 billion, with total revenues of CZK 42.7 billion and expenditures of CZK 37.3 billion. Excluding the City of Prague, the total consolidated revenues of municipalities amounted to CZK 109.5 billion, expenditures to CZK 109.2 billion, and the budget result ended with a surplus of CZK 0.3 billion. After adjusting the municipalities' budgetary result (for the capital city of Prague) for direct expenditures on education and subsidies for private schools1, the adjusted balance is CZK 5.6 billion.
Total municipal revenues in April reached CZK 152.2 billion, up 2.7% year-on-year, or CZK 4 billion. After adjusting municipal revenues (for the capital city of Prague) for direct expenditures on education and subsidies for private schools1, adjusted revenues amounted to CZK 142.5 billion. Municipalities' own revenuesi, which accounted for 85.7% of total adjusted revenues2 in April, recorded a slight year-on-year decline and reached CZK 122.1 billion.
The largest share of own revenues is accounted for by tax revenues, which increased by 2.5% year-on-year, i.e. by CZK 2.5 billion, to CZK 99.7 billion. The most significant year-on-year increase was in income from personal income tax (by 8.8%, or CZK 1.8 billion), reflecting wage and salary growth, but also the impact of tax changes effective from 2024. In addition, income from corporate income tax increased (by 3.6%, or CZK 0.8 billion) and other tax revenues increased (by 0.7%, or CZK 0.3 billion). A year-on-year decline was recorded only in VAT revenue (by 4%, or CZK 0.4 billion).
By the end of April, municipalities received transfers amounted to CZK 30.1 billion (year-on-year growth of 16.8%, i.e. CZK 4.3 billion). Of these, non-investment transfers amounted to CZK 23.8 billion and increased year-on-year (by 15.2%, i.e. by CZK 3.1 billion). Investment transfers received by municipalities increased year-on-year (by 23.1%, i.e. by CZK 1.2 billion) to CZK 6.3 billion.
The balances on bank accounts and the debt of municipalities are only available for December 20243 from: Report on the development of budgetary management of municipalities, voluntary associations of municipalities and regions as at 31 December 2024.
Voluntary associations of municipalities
In April 2025, the voluntary associations of municipalities had total revenues of CZK 2.3 billion and total expenditures of CZK 1.8 billion. The budget balance decreased year-on-year and ended in a surplus of CZK 0.4 billion.
1 The direct costs of education and subsidies for private schools represent funds from the state budget, which are distributed and directly allocated to the schools and school facilities by regions and Prague. It is therefore a non-investment flow transfer and the region and Prague cannot dispose of these funds in any way. For this reason, the total revenues and expenses of the regions and Prague are reduced so not to distort their results of management.
2 Total revenue net of revenue from transfers for direct expenditure on education and from subsidies to private schools.
3 The balance on bank accounts and debt are available from the financial statements, which are submitted to the Central State Accounting Information System on a quarterly basis.
i Own revenue = tax + non-tax + capital revenue